While the Cabinet had sought to cut a recommended rise of 37.9 per cent to 9.8, an all-party move to implement the independent Review Body on Top Salaries' full increase was passed by 324 votes to 197, despite the presence of the payroll vote - more than 100 ministers and their aides - wheeled in to try to vote the measure down.
More than 120 MPs abstained.
Dismissing the plea by Tony Newton, Leader of the House, for the office cost allowance to be pegged at pounds 33,190, MP after MP defended the need for a bigger increase to pay for equipment and decent salaries for secretaries and researchers.
An amendment supported by Labour, Liberal Democrat, Scottish Nationalist, Ulster Unionist and Conservative members implements in full the pounds 39,960 limit recommended by the review body.
Amid Labour calls for the allowance to be fixed in future by the Commons Commission and attacks on the Government from both sides of the House for appointing a review body and then ignoring it, MPs emphasised that the issue was not about pay.
Jerry Wiggin, a Conservative rebel who put his name to the amendment, said: 'This is not about salaries. It is not about our income.
'I am very sorry that the Government, by this attempt to cheese-pare, has produced yet again controversy, misunderstanding and a dispute which need never have existed had they published the report and adopted it.'
Teresa Gorman, another Tory dissenter, urged colleagues to 'stop pussy-footing around', reminding them that most low-paid back-up staff were women.
John Gorst, another Conservative, said the aim of the increase was to enable MPs to examine what the executive was doing.
To loud Labour cheers, he said: 'The Government has interest, I would suspect, in ensuring that that is as little as possible.'
Chris Smith, the Labour member who tabled the amendment, said the debate was about how MPs could ensure they did a proper job for constituents. 'Surely the bare minimum that we need in order to carry out that job properly is to employ two full-time members of staff, to pay them properly, to give them decent conditions of work and properly to establish and equip an office in our constituency.'
Jack Cunningham, shadow Leader of the House, accused the Government of first suppressing the review body's report and then leaking it selectively to newspapers. 'This is a recipe for confusing the public,' he said.
What happened with all governments after elections was that ministers went to their offices and got their nice new Rover or Daimler. 'They have got everything provided for them and like what they have got. But the last thing they want to face up to day in and day out is a better informed, better resourced House of Commons,' he said.
Mr Newton said the Government's proposal struck 'a fair balance between the interests of our constituents as taxpayers and the undoubted need of MPs for sufficient support to carry out their duties.'
The defeat was no surprise to the Government as opposition gathered pace yesterday. To laughter, Dr Cunningham said there were rumours the Chief Whip (Sir Richard Ryder) was trying to ensure that the Government did not win in the Lobbies.Reuse content